BRAND EQUITY

What is Brand Equity?

Brand equity is a marketing term that describes a brand’s value. That value is determined by consumer perception of and experiences with the brand. If people think highly of a brand, it has positive brand equity. When a brand consistently under-delivers and disappoints to the point where people recommend that others avoid it, it has negative brand equity.

Positive brand equity has value:

• Companies can charge more for a product with a great deal of brand equity.
• That equity can be transferred to line extensions – products related to the brand that include the brand name – so a business can make more money from the brand.
• It can help boost a company’s stock price.

How Brand Equity Develops

Brand equity develops and grows as a result of a customer’s experiences with the brand. The process typically involves that customer or consumer’s natural relationship with the brand that unfolds following a predictable model:

• Awareness – The brand is introduced to its target audience – often with advertising – in a way that gets it noticed.
• Recognition – Customers become familiar with the brand and recognize it in a store or elsewhere. 
• Trial – Now that they recognize the brand and know what it is or stands for, they try it. 
• Preference – When the consumer has a good experience with the brand, it becomes the preferred choice. 
• Loyalty – After a series of good brand experiences, users not only recommend it to others, it becomes the only one they will buy and use in that category. They think so highly of it that any product associated with the brand benefits from its positive glow.

Source: https://www.shopify.co.uk/encyclopedia/brand-equity

“a set of brand assets and liabilities inked to a brand name and symbol which add to or subtract from the value provided by a product or service”( Aaker, 1991, p. 15)

“Brand equity provides value for the firm by enhancing the efficiency and effectiveness of marketing programs and providing higher margins for products through premium pricing and decreased reliance on promotions. It also provides a platform for growth through brand extensions...” (Fashion Branding and Communication: Core Strategies of European Luxury Brands, Byoungho Jin (Editor), Elena Cedrola (Editor), 2017)

 “L Brands continues to deal with a Victoria’s Secret concept that is struggling to find its new identity (shifting core focus from core lingerie to ancillary categories), while they also appear to be seeing softness within their Bath & Body Works concept and international operations,” Wells Fargo wrote in a Tuesday note.

Source: https://www.marketwatch.com/story/victorias-secret-parent-l-brands-is-finally-feeling-the-pain-of-mall-traffic-declines-2017-02-23

Victoria’s Secret creates strong brand equity by offering a luxurious shopping experience through store layout design and other in-store services like expert bra-fitting. The Victorian design is welcoming, but intimate at the same time, while staff are trained to always be helpful, giving the best advice for demanding customers. Providing excellent in-store experiences for their clients makes a purchase feel like an investment. 

The girls they choose as brand ambassadors (Angels) over time, were rising models at first, with real personalities that customers can relate to and aspire to be like at the same time. Adriana Lima, Miranda Kerr, Alessandra Ambrosio, Behati Prinsloo are all mothers and wives first, before being insanely beautiful supermodels.

Their fashion show is also something they heavily rely on for creating higher product profit margins, as some of the lingerie styles worn by the models on the catwalk inspires the merchandise sold in the stores. 

The "Scalloped Lace Bustier" (right) looks nearly identical to the one worn by Jasmine Tookes (left)

Credit: Dimitrios Kambouris/Getty Images and Victoria's Secret

Source: https://www.thisisinsider.com/where-to-buy-victorias-secret-fashion-show-lingerie-2018-11

These elements allow VS to place their merchandise in the affordable luxury category.

Even though the Victoria’s Secret strategy of creating its own perfectly sexy universe has been highly successful, as they offered women the chance to be a part of it and experience this fantasy world full of glamour and sexiness portrayed by their “angels” (supermodels considered to be the ultimate babes), the brand is slowly losing the sympathy and loyalty of their customers as more and more women feel like the Victoria’s Secret “paradise” is actually a world of exclusivity where the idea of female beauty and sexiness is very narrow: white, slim and 6ft tall. It’s no surprise that the vast majority is starting to feel  left out, when the average woman in the UK is 5ft 5in tall and wears a size 16.

For many years Victoria’s Secret used the “supermodel” recipe for success to mass market products by taking advantage of customers' insecurities, giving them a false impression of empowerment and belongingness, instead of really empowering them by making them feel beautiful and confident in their own skin. A 2014 campaign “The perfect body” generated a lot of consumers rage and prompted a petition that demanded a change of slogan, which was signed by nearly 28000 people. Eventually the brand changed its campaign to “A body for everybody”, but the damage was already done and the public’s response predicted the body positivity trend that was already starting to trickle into the lingerie market.

In 2018 the brand’s CMO, Ed Razek tried to incorporate trending movements like feminism, body positivity and diversity into their world-famous annual fashion show, but the results were not what people expected and proved how out of step the brand is with current consumer perceptions of inclusiveness and body positivity. As US author Jill Filipovic opinionated in 2016, "putting conventionally attractive women onstage — even if those women are more racially diverse than in past years — and using them as physical representations of sex in order to sell bras isn't exactly a manifestation of the feminist dream". (Quote from: Authors: Manavis, Sarah; Source: New Statesman. 11/16/2018, Vol. 147 Issue 5445, p18-19. 2p. 1 Illustration). Recent remarks of the brand’s CMO in an interview with Vogue also stirred a lot of online backlash and reinforced the Victoria’s Secret idea of female beauty: "Does the brand think about diversity? Yes. Do we offer larger sizes? Yes," he said. "Shouldn't you have transsexuals in the show? No. No, I don't think we should. Well, why not? Because the show is a fantasy"…We attempted to do a television special for plus-sizes [in 2000]. No one had any interest in it, still don’t."

From my personal research and other underwear/lingerie brands approach to marketing, identity, logistics and supply chain, I am finding that  the two key-elements younger Generations of consumers (younger Millennials and older Gen Zedders) value most in a brand are transparency and authenticity (Jeff Fromm, Forbes, 2017).